Morgan Stanley Compensation & Governance Practices - April 2022
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Morgan Stanley Compensation & Governance Practices April 2022
Morgan Stanley’s Board of Directors Recommends Shareholders Vote:
• FOR: Three Management Proposals
–1 Approve the compensation of named executive officers (Say on Pay non-binding advisory vote)
• At the start of 2021, the Compensation, Management Development and Succession (CMDS) Committee established a
target range and factors to determine CEO compensation
• Based on individual performance and record financial results in 2021, including advancing the Firm’s transformational
growth, total CEO compensation was set at $35 million
• Under Mr. Gorman’s leadership:
‒ The Firm achieved record revenues, profits before tax and earnings per share. Full year Return on Tangible Common
Equity (ROTCE), Efficiency Ratio, and Wealth Management pre-tax margin (excluding integration expenses) met or
exceeded their two-year objectives
‒ Strong relative performance in Total Shareholder Return (TSR) versus peers in 2021 and top performance over
3- & 5-year periods. The Firm’s share price increased 43% and market cap increased by approximately $50 billion to
$174 billion
‒ The Firm doubled its annualized dividend and continued to increase returns to shareholders
‒ The Firm drove significant growth in its businesses and continued to integrate E*TRADE and Eaton Vance
‒ The Firm enhanced its employee wellness offerings and commitment to diversity and inclusion
• Consistent with prior years and shareholder feedback, 75% of 2021 CEO incentive compensation is deferred and subject to
clawback over three years and 100% of deferred incentive compensation is delivered in equity awards
• For 2021, the portion of CEO incentive compensation delivered in performance-vested equity was increased from 50% to
60% and the ROTCE threshold to earn a maximum payout of 1.5 times this portion of the award was increased from
15% to 16%
2Morgan Stanley’s Board of Directors Recommends Shareholders Vote:
• FOR: Three Management Proposals
•2 Elect all Director Nominees
•3 Ratify Deloitte & Touche LLP’s Appointment as the Firm’s Independent Auditor
• AGAINST: One Shareholder Proposal
•1 Adopt Policy to Cease Financing New Fossil Fuel Development
3Our Business Model Performed and Delivered Record Results
2019 2020 2021
As reported As reported As reported
Net Revenues $41.5Bn $48.8Bn $59.8Bn
Efficiency Ratio (2) 72% 69% 67%
Net Income (3) $9.0Bn $11.0Bn $15.0Bn
FIRM (1)
ROTCE (4) 13.4% 15.2% 19.8%
EPS (5) $5.19 $6.46 $8.03
Dividends $2.2Bn $2.3Bn $3.8Bn
The End Notes are an integral part of this presentation. See slides 21-23 for information related to the content presented on this page.
4Executing on Growth Objectives
Institutional Securities Wealth Management Investment Management
Wallet Share Net New Assets Assets Under Management
(%) (1)(2)(3)(4) ($Bn) (5) ($Tn) (6)
438
1.6
15%
11%
0.4
74
2014 2021 2014 2021 2014 2021
The End Notes are an integral part of this presentation. See slides 21-23 for information related to the content presented on this page.
5Strong Results in 2021 Against Two-Year Objectives
2021 – 2022 Objectives 2021 Results (Ex-Integration)
ROTCE (1) 14 – 16% 20%
Efficiency Ratio (2) 69 – 72% 66%
WM Pre-Tax Margin (3) 26 – 30% 27%
The End Notes are an integral part of this presentation. See slides 21-23 for information related to the content presented on this page.
6Generating Consistent Shareholder Return
(1)(2) (1)(2)(3)
1-Year (2021) TSR 3-Year (2019-2021) TSR 5-Year (2017-2021) TSR (1)(2)(4)
Top Relative Performance by MS vs. Peer Average and Market Across All Time Periods
During 2021, Morgan Stanley share price increased by 43% from $68.53 to $98.16 and market cap increased by $50Bn to $174Bn
168%
163%
86%
75%
60%
47%
35% 36%
24%
Morgan Avg. Global S&P 500 Fin. Morgan Avg. Global S&P 500 Fin. Morgan Avg. Global S&P 500 Fin.
Stanley Peers (5) Index Stanley Peers (5) Index Stanley Peers(5) Index
The End Notes are an integral part of this presentation. See slides 21-23 for information related to the content presented on this page.
7Reset Dividend While Maintaining Excess Capital
Doubled Dividend in 2021 Increased Buyback Maintained Excess Capital
Annualized Dividend ($) (1) Share Repurchases ($Bn) CET1 Ratio (%) (2)
11
2.80
~280 bps
16.0%
Regulatory
Requirement:
10.9% 13.2%
1.40
1
2020 2021 2014 2021 2014 2021
Excess Capital vs. Regulatory Requirement
The End Notes are an integral part of this presentation. See slides 21-23 for information related to the content presented on this page.
8Employee and Community Focus While Continuing to Strengthen
Diversity and Inclusion
CULTURE
Continued to exemplify the Firm’s Core Values: Do the Right Our culture guides our employees, and
Thing, Put Clients First, Lead with Exceptional Ideas, Commit to our values inform everything we do
Diversity and Inclusion, and Give Back
EMPLOYEE &
Continued to focus on the health and wellbeing of our COMMUNITY FOCUS
employees with enhancements to the 401(k) and paid leaves to
care for our families and provided a special payment to ~40K
employees
DIVERSITY
In conjunction with the Institute for Inclusion (IFI), drove Value diverse perspectives
workforce diversity, invested in underserved communities and and create a corporate
enhanced engagement with diverse-led businesses culture in which everyone
feels they belong
Engaged third party consultant to audit our core talent processes;
the Firm is taking action based on the results
Introduced representation objectives to drive greater accountability
and improve workforce diversity
Launched IFI Talent Accelerator to support development and retention of diverse talent
Launched efforts in support of racial equity, including a $20MM investment to create more accessible pathways
to college and career success for students from low-income backgrounds; and the $12MM HBCU Scholars Program
Investing in a number of efforts in support of diverse-led businesses including the Small Business Academy and the
Multicultural Innovation Lab
9Compensation Program Objectives and Features
Morgan Stanley has a pay for performance philosophy for its Named Executive Officers (NEOs), and is
committed to responsible compensation programs with the following key objectives, all of which support
the Firm’s culture and values and shareholders’ interests
Key Objectives Key Features
Deferred incentive compensation with three-year vesting,
cancellation and clawback and no automatic vesting upon
change-in-control
Performance-vested equity incentive award where shares
Deliver Pay for Align Compensation earned can range from 0 to 1.5x target based on three-year
Sustainable with Shareholders’ performance against ROTCE and TSR objectives
Performance Interests • Increased ROTCE threshold required to achieve the 1.5x
multiplier (new)
• Increased percent of bonus awarded in performance-
vested equity incentive award for all NEOs (CEO
increased from 50% to 60%) (new)
100% of CEO’s deferred compensation is awarded in equity
with share ownership and retention requirements
Attract and Retain Mitigate Excessive Executive compensation best practices, including
Top Talent Risk-Taking prohibitions on pledging, hedging, selling short or trading
derivatives and no excise tax protection upon change-in-
control
10Framework for Determining CEO Compensation
Morgan Stanley has a robust process that supports and reinforces the pay for performance philosophy
that incorporates the following key steps:
Set Performance Establish Target Assess Determine
Priorities Compensation Range Performance Compensation
In the context of the Firm’s The CMDS Committee establishes The CMDS Committee assesses The CMDS Committee determines
strategic objectives, the Board sets the target CEO compensation Firm and executive performance at CEO compensation after year end
annual performance priorities range year end, including: based on its performance
• Priorities include both financial • The range is informed by prior • Progress in achieving the Firm’s assessment and discussion with
and non-financial performance year CEO compensation at peer strategic objectives and annual the Board
metrics for the Firm and its financial firms, among performance priorities The CMDS Committee determines
business segments other factors • The CEO’s overall leadership CEO compensation elements that
• Guidelines for performance support the Firm’s key
assessment are outlined compensation objectives
MS CEO Target Compensation Range (1)
$28 Million or More
• CEO performance exceeds expectations
• Strong Firm performance and shareholder returns
• CEO performance meets expectations
• Firm performance and shareholder returns generally in line with peers with room for continued progress
• CEO performance below expectations
• Firm performance and shareholder returns are below expectations
$10 Million or Less
The End Notes are an integral part of this presentation. See slides 21-23 for information related to the content presented on this page.
11Annual Performance Priorities
Each year, the CMDS Committee and Board set performance priorities with management. Performance
against these quantitative and qualitative measures inform executive compensation decisions
Quantitative Qualitative
Firm financial performance Firm risk management and controls
Business segment performance Credit rating
Expense Efficiency Ratio and ROTCE Regulatory standing
Total Shareholder Return Talent development and diversity progress
Board assessment of Firm culture, leadership, strategy,
Capital and liquidity strength
resilience and reputation
12CEO Compensation Determination
At year end, the CMDS Committee assessed CEO and Firm performance, discussed that assessment with
the Board, and established 2021 CEO compensation
2021 Performance Evaluation 2021 CEO Compensation Elements ($MM)
Record financial performance in 2021;
+ $35MM
exceeded strategic objectives % of Incentive Compensation
60%
Continued strategic transformation and
Performance-Vested Equity
+ thoughtful development of senior Incentive Compensation
20.1
100%
leadership to drive significant growth Equity
Incentive
Compensation
Significant increase in stock price/ 15%
+ premium valuation relative to peers; Time-Vested Deferred Equity 5.0
increased shareholder returns Incentive Compensation
25%
Enhanced employee health/ financial 8.4
Cash Bonus
+ wellness offerings; strong commitment
to diversity and inclusion
Base Salary 1.5
Losses related to a single client event in
–
the first quarter Proxy Summary Compensation Table View: $34.9MM
(Current year cash + prior year stock awards) (1)
The End Notes are an integral part of this presentation. See slides 21-23 for information related to the content presented on this page.
13Committed to Maintaining Best in Class Governance
Key Corporate Governance Practices
ROBUST BOARD ANNUAL BOARD SHAREHOLDER RIGHTS COMMITTED TO VALUE AND RESPOND TO
OVERSIGHT EVALUATION AND ACCOUNTABILITY SUSTAINABILITY SHAREHOLDER FEEDBACK
• Firm’s strategy, including • One-on-one interviews • Adopted proxy access • Sustainability Report • Investor input in recent
an annual offsite with for Board, Independent • Shareholders who own informed by SASB years has led to:
management Lead Director and at least 25% of common Guidance – Enhanced proxy
• Annual business plans committee evaluations stock may call special • Climate Change report in disclosure of
include: meeting of shareholders line with TCFD alignment
• Enterprise Risk
– Duties and recommendations of compensation and
Management (ERM) • All directors elected
responsibilities, performance, and
framework annually by majority vote • Pledged to reach net-
including individual ESG matters
• ESG, including diversity • No “poison pill” in effect zero financed emissions
director performance – Inclusion of a Board
and inclusion and climate by 2050
– Board and committee matrix that shows
change matters • Interim 2030 financed gender and
structure, including
• Culture, values and emissions targets for the race/ethnicity for each
board and ethnic
conduct most emissions-intensive director nominee
diversity
sectors within our – Our Diversity and
• Succession plans for – Culture, process corporate lending Inclusion Report
CEO and senior and execution portfolio – Amendments to
executives
• Policies and practices are the Board’s
revised as appropriate “overboarding” policy
14Board of Directors Has Relevant and Diverse Experience
Board Tenure Balance Board Independence
Average Tenure: 5.5 years All members of all committees are non-management, and the Board
benefits from an engaged Independent Lead Director (1) with
10 years +: expansive responsibilities
1 Management:
1
5-10 years:
Non-Management:
7
Less than 5 years: 13
6
Diverse and International Board (2) Nominees’ Skills Align with Firm Business Model and Strategy
Cybersecurity / Technology /
Cybersecurity / Technology / Information Security 7
Information Security
4 4 50% Accounting/ /Financial
Accounting FinancialReporting
Reporting 8
female ethnically of board is gender
directors diverse directors and/or ethnically ESG/ Sustainability
ESG / Sustainability 8
diverse Currentor
Current orFormer
Former CEO
CEO 9
RiskManagement
Risk Management 9
FinancialServices
Financial Services 11
5 63.9 years 5 HumanCapital
Human CapitalManagement
Management 12
directors Average age of Board new directors in the Academia / Government /
born outside upon election at last three years (since Academia / Government /… 12
Public Policy / Regulatory Affairs
of the U.S. annual meeting beginning of 2019) Global/
Global InternationalPerspective
/ International Perspective 12
PublicCompany
Public CompanyGovernance
Governance 13
The End Notes are an integral part of this presentation. See slides 21-23 for information related to the content presented on this page.
15Independent Board Leadership and Board Refreshment
James Gorman (63) Hironori Kamezawa (60) Dennis M. Nally (69)
Tenure: 12 Years Tenure: 1 Year CMDS Chair
• Chairman of the Board • Currently President and Group CEO of MUFG Tenure: 5 Years
and Director of MUFG and MUFG Bank • Previously Chairman of Pricewaterhouse
• Previously President of MS, President of
• Previously Deputy President of MUFG and Coopers International Ltd.
MS Wealth Management and Co-Head of
Deputy President of MUFG Bank
Strategic Planning
Alistair Darling (68) Shelley Leibowitz (61) Mary L. Schapiro (66)
Tenure: 6 Years Tenure: 1 Year Tenure: 3 Years
• Previously Chancellor of the Exchequer, • Currently President of SL Advisory • Currently Vice Chair for Public Policy and
Member of the House of Lords and the House • Previously Group Chief Information Officer for Special Advisor to the Founder and Chairman
of Commons, and served in the Government of the World Bank and Chief Information Officer of Bloomberg L.P.
the United Kingdom of several financial services firms • Previously Chair of U.S. Securities and
Exchange Commission
Thomas H. Glocer (62) Stephen Luczo (65) Perry M. Traquina (66)
Independent Lead Director Tenure: 2 Years Risk Chair
Tenure: 9 Years • Currently Managing Director at Crosspoint Tenure: 7 Years
• Previously CEO of Thomson Reuters Capital Partners • Previously Chair, CEO and Managing Partner of
Corporation and M&A lawyer at Davis Polk • Previously Chair and CEO of Seagate Wellington Management Company LLP
& Wardwell LLP Technology
Robert H. Herz (68) Jami Miscik (63) Rayford Wilkins, Jr (70)
Audit Chair Ops and Tech Chair N&G Chair
Tenure: 9 Years Tenure: 7 Years Tenure: 8 Years
• Currently President of Robert H. Herz LLC • Currently CEO and Vice Chair of Kissinger • Previously CEO of Diversified Businesses
• Previously Chairman of Financial Accounting Associates, Inc. of AT&T Inc.
Standards Board • Previously Global Head of Sovereign Risk at
Lehman Brothers and Deputy Director for
Intelligence at the CIA
Erika H. James (52) Masato Miyachi (61)
Joined 2022 Director Nominee
• Currently Dean of the Wharton School of the • Currently Director, Deputy President and Chief
University of Pennsylvania Executive of Global Corporate and Investment
• Previously John H. Harland Dean at Emory Banking of MUFG Bank
University’s Goizueta Business School
= New Director in 2019-2022
The End Notes are an integral part of this presentation. See slides 21-23 for information related to the content presented on this page.
16Morgan Stanley Has a Clear Climate Transition Path
Morgan Stanley’s public commitments to a low carbon economy are supported by robust governance and
transparent disclosures
Our Public Commitments Governance and Disclosure
• Achieve “Net-Zero Financed Emissions” by 2050 Our Board oversees our policies and risks regarding
climate change, including our public commitments
– Consistent with our membership in the United
regarding our climate transition path and our
Nations-convened Net- Zero Banking Alliance
Environmental and Social Policy Statement
– First major U.S. headquartered global financial
services firm to make this commitment Our Policy Statement:
• Interim 2030 financed emissions targets for the most – Contains commitments relating to our financing
emissions-intensive sectors within our corporate and other activities in emissions-intensive sectors
lending portfolio: – Limits certain activities in these sectors
– Energy
– Power Climate change considerations are integrated into
– Auto Manufacturing our risk management and governance processes
• Mobilize $750Bn to support low-carbon solutions – Our Climate Change Report is in line with
by 2030 TCFD recommendations and supplements
our SASB disclosures
• Carbon neutrality across our global operations in 2022
17Morgan Stanley’s Board of Directors Recommends Shareholders
Vote Against Proposal Requesting Policy to Cease Financing New
Fossil Fuel Development
• Morgan Stanley supports the transition to a low-carbon economy. We have already committed to a climate transition
path and have announced multiple commitments to help facilitate this transition.
− In 2020, we were the first major U.S. headquartered global financial services firm to commit to achieve Net-Zero
financed emissions by 2050. This commitment was reviewed by our Board and is consistent with our membership in
the United Nations-convened Net-Zero Banking Alliance.
− In 2021, we publicly announced our 2030 interim financed emissions targets for auto manufacturing, energy and
power, which we identified as the most emissions-intensive sectors in our corporate lending portfolio. Our reduction
targets, which cover client Scope 1, Scope 2 and Scope 3 emissions and all greenhouse gases, inclusive of the
corporate lending portfolio, are consistent with, and sourced from, the emissions pathways for these sectors as
modeled in the International Energy Agency (“IEA”) Net-Zero Emissions by 2050 Scenario that is requested by the
proposal.
− In 2021, we committed to mobilize $750 billion to support advancing low carbon solutions by 2030, tripling our
pledge from 2018. We also aim to source 100 percent of our global operational needs from renewable energy and
offset any remaining emissions.
• Our Board oversees Morgan Stanley’s policies with respect to emissions-intensive sectors, including as outlined in our
Environmental and Social Policy Statement, which was adopted by the Nominating and Governance Committee of the
Board and is available on our website at
www.morganstanley.com/content/dam/msdotcom/en/about-us-governance/pdf/Environmental_and_Social_Policy_Statement.pdf
− Our Policy Statement is reviewed and updated regularly and includes meaningful commitments relating to our
financing and other activities focused on emissions-intensive sectors. Our efforts include restrictions on certain
activities (e.g., coal-fired power generation, thermal coal mining, and Arctic drilling).
18Morgan Stanley’s Board of Directors Recommends Shareholders
Vote Against Proposal Requesting Policy to Cease Financing New
Fossil Fuel Development
− For clients in the oil and gas sectors, our policies provide that we will engage with them to understand their
greenhouse gas reduction initiatives, Net-Zero commitments and other strategies, and also conduct enhanced due
diligence for transactions.
• Morgan Stanley believes it is well positioned to help companies make progress in addressing the transition to a low-
carbon economy by providing our knowledge to support our clients on their transition journey.
− Morgan Stanley’s approach to being an advocate for thoughtfully managing climate risk and contributing to
decarbonization, which we have developed within our own organization, facilitates the path for other companies to
meet their climate risk management objectives.
• The transition to a low-carbon economy is complex and requires intentional balancing of risks and opportunities. The
proposal unnecessarily restricts Morgan Stanley’s ability to conduct our operations by inherently limiting lending and
underwriting activities that “contribute to” fossil fuel expansion, potentially affecting a broad array of clients. The
proposal could lead to far-reaching consequences that could affect our business decisions, require meaningful resources
to implement, and impact our relationships with our clients and other stakeholders.
− Morgan Stanley recognizes the societal risks posed by climate change. As discussed above, despite Morgan Stanley’s
existing public commitments to transition to a low-carbon economy, the proposal seeks to impose specific measures
and dictate a prescribed method to achieve such policy that limits Morgan Stanley’s discretion. Implementation of
the proposal could require Morgan Stanley to take measures to avoid new financings, and cease all forms of ongoing
financings, to our clients that are involved in, or otherwise indirectly contribute to, fossil fuel development.
− The proposal’s “one size fits all” approach to the complicated objective of reducing carbon emissions does not leave
room for Morgan Stanley management to weigh the complex variables, and manage associated risks, that are needed
in deciding whether to enter into new businesses or manage our existing obligations.
19Morgan Stanley’s Board of Directors Recommends Shareholders
Vote Against Proposal Requesting Policy to Cease Financing New
Fossil Fuel Development
• From a risk perspective, we have been intensely focused on integrating climate risk considerations into our risk
management processes. We believe our Net-Zero commitment and our interim targets discussed above will help
reduce our exposure to transition risk from the most emissions-intensive companies over time.
− We expect to reduce our transition risk through sound client engagement and risk management processes that
support our clients’ transition to more sustainable, lower-carbon business models that may be less vulnerable to
changes in policy, technology and consumer sentiments.
• While we have utilized the most relevant part of IEA Program Finance Initiative to guide our financed emissions
pathway, we did not commit to completely instituting every aspect of the initiative as it is critical that we adapt the
initiative to what is best for Morgan Stanley and our stakeholders.
− While this framework calls for an immediate end to fossil fuel expansion, we believe that there must be a
balancing of the potential impacts on Morgan Stanley, the economy and on society.
− At this time, we believe immediately removing support from key sectors like energy (or even providing in a policy
for removal of support by a future date) would also likely undermine a smooth climate transition and the role
that Morgan Stanley can play.
• For the foregoing reasons, the Board believes the policy requested by the proposal is unnecessary in light of our
Net-Zero commitment, interim financed emissions targets and other public commitments; robust risk management
programs and policies; and ability to assist clients in their transition to a low-carbon economy.
20End Notes
The following notes are an integral part of the Firm’s financial and operating performance described in this presentation:
General
A detailed analysis of the Firm’s financial and operational performance for 2021 is contained in Management’s Discussion and Analysis of Financial Condition and
Results of Operations in [Part II, Item 7] of the Firm’s Annual Report on Form 10-K for the year ended December 31, 2021 (‘2021 Form 10-K’). This presentation may
refer to certain non-GAAP financial measures which we believe to be useful to us, investors, analysts and other stakeholders by providing further transparency about,
or an additional means of assessing our financial condition and operating results. The definition of such non-GAAP financial measures and/or the reconciliation of such
measures to comparable GAAP figures is included in either the 2021 Form 10-K or herein.
Page 4
1. 2019 and 2020 reflect updates to our financial presentation implemented in the first quarter of 2021, with provision for credit losses on loans and lending
commitments presented as a separate line item.
2. The expense efficiency ratio (‘Efficiency Ratio’) represents total non-interest expenses as a percentage of net revenues.
3. Net Income represents net income applicable to Morgan Stanley.
4. Return on average tangible common equity (‘ROTCE’) represents net income applicable to Morgan Stanley less preferred dividends as a percentage of average
tangible common equity. Average tangible common equity represents average common equity adjusted to exclude goodwill and intangible assets net of
allowable mortgage servicing rights deduction.
5. Earnings Per Share (‘EPS’) represents earnings applicable to Morgan Stanley common shareholders divided by diluted common shares outstanding.
Page 5
1. Wallet represents aggregated reported net revenues of Morgan Stanley and the following peers: Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche
Bank, Goldman Sachs, JP Morgan, and UBS. Morgan Stanley’s ISG wallet share represents total ISG segment net revenues. Peer wallet includes revenues that
represent Investment Banking, Equity Sales & Trading and Fixed Income Sales & Trading, where applicable. For firms that disclose results between multiple
segments, assumptions have been made based on company disclosures. Morgan Stanley’s 2014 Wallet Share is calculated as the percentage of Morgan Stanley’s
net revenues, excluding positive DVA ($651 million) to the Wallet and has been restated to conform with current reporting methodology. Peer data for 2014 has
been adjusted for DVA, where it is reported and where applicable.
2. Credit Suisse Equity Sales & Trading and Institutional Securities-equivalent revenues for nine months 2021 were adjusted to include net provisions of $4,582MM
related to expected losses related to a U.S.-based hedge fund matter.
3. European peer results were translated to USD using average exchange rates for the appropriate period; sourced from Bloomberg.
4. The 2021 Wallet estimates represent results for peers that have reported full-year 2021 results as of February 23, 2022.
5. Net New Assets represents client inflows, including dividends and interest, and asset acquisitions, less client outflows, and excluding activity from business
combinations/divestitures and the impact of fees and commissions.
6. Represents reported assets under management (‘AuM’) of Morgan Stanley Investment Management (‘MSIM’) as of period end.
21End Notes
Page 6
1. The calculation is adjusted to exclude the impact of integration‐related expenses, which were $456 million on a pre-tax basis or $352 million on an after-tax basis
in 2021. The adjusted ROTCE is a non-GAAP financial measure. The reported 2021 ROTCE is 19.8%.
2. Efficiency Ratio is adjusted to exclude the impact of integration-related expenses. The adjusted Efficiency Ratio is a non-GAAP financial measure. The reported
2021 Efficiency Ratio is 67%.
3. Pre-Tax Margin represents income (loss) from continuing operations before taxes divided by net revenues. The calculation is adjusted to exclude the impact of
integration-related expenses. The adjusted Pre-Tax Margin is a non-GAAP financial measure. The reported 2021 WM Pre-Tax Margin is 25%.
Page 7
1. Total Shareholder Return represents the change in share price over a period of time plus the dividends paid during such period, expressed as a percentage of the
share price at the beginning of such period (defined herein as “TSR”).
2. Source: Bloomberg.
3. Share prices pulled as of 12/31/2018 and 12/31/2021 to calculate 3-year TSR.
4. Share prices pulled as of 12/31/2016 and 12/31/2021 to calculate 5-year TSR.
5. Global peers include: Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, and UBS.
Page 8
1. Annualized Dividend based on fourth quarter of each respective year. The quarterly dividend was increased from $0.35 to $0.70 in 2Q 2021 and the annual
dividend for full-year 2021 was $2.10.
2. Common Equity Tier 1 capital ratio is based on the Basel III Standardized Approach Fully Phased-in rules. The Firm early adopted the Standardized Approach for
Counterparty Credit Risk (‘SA-CCR’) under Basel III on December 1, 2021. As a result of the adoption, as of December 31, 2021 our risk-weighted assets under the
Standardized Approach increased by $25 billion and our Standardized CET1 capital ratio decreased by 90 basis points.
Page 11
1. Compensation range informed by available 2021 compensation levels for the 16 financial companies in the S&P 100 index (Bank of America, Citigroup, Goldman
Sachs Group, JP Morgan, Wells Fargo, AIG, Allstate, American Express, BlackRock, Bank of New York Mellon, Capital One Financial, MasterCard, MetLife, PayPal,
US Bancorp, VISA).
22End Notes
Page 13
1. Pursuant to SEC rules, the Summary Compensation Table in the Firm’s proxy statement is required to include for a particular year, only those equity awards
granted during the year, rather than awards granted after year end that were awarded for performance in that year. Our annual equity awards relating to
performance in a year are made shortly after year end. Therefore, the Summary Compensation Table that appears in the Firm’s 2022 proxy statement includes
not only non-equity compensation awarded for service in 2021, but also stock awards and forward-looking performance vested compensation in respect of
performance in 2020, in each case granted in 2021.
Page 15
1. As part of his or her formal duties and responsibilities, the Independent Lead Director shall:
• Preside at all meetings of the Board at which the Chairman is not present;
• Have the authority to call, and lead, Non-Management Director Sessions and Independent Director Sessions;
• Help facilitate communication among the Chairman, the CEO and the non-employee and independent directors, including serving as liaison between the
Chairman and the Independent directors;
• Solicit the non-employee directors for advice on agenda items for meetings of the Board;
• Communicate with the Chairman and the CEO between meetings and act as a "sounding board" and advisor;
• Advise the Chairman and the CEO of the Board's informational needs;
• Approve the types and forms of information sent to the Board;
• Collaborate with the Chairman and the CEO in developing the agenda for meetings of the Board and approve Board meeting agendas and the schedule of
Board meetings to assure that there is sufficient time for discussion of all agenda items and may request inclusion of additional agenda items;
• Be available, if requested, to meet with the Firm's primary regulators;
• Be available, if requested by major shareholders, for consultation and direct communication in accordance with the Board Communication Policy;
• Lead the annual evaluation of the performance and effectiveness of the Board;
• Consult with the Chair of the Nominating and Governance Committee on Board succession planning and Board Committee appointments;
• Interview candidates for the Board; and
• Consult with the Chair of the CMDS Committee on the annual evaluation of the performance of the CEO.
2. Data and metrics as of the date of the annual meeting and based on characteristics self-identified by director nominees.
Page 16
1. Director ages are as of the annual meeting date. For a detailed description of each director’s professional experience and qualifications, skills and attributes, see
“Director Nominees” of the 2022 Proxy Statement.
23Notice
The information provided herein may include certain non-GAAP financial measures. The definition of such financial measures and/or
the reconciliation of such measures to the comparable GAAP figures are included in the Firm’s Annual Report on Form 10-K for the
year ended December 31, 2021, which is available on www.morganstanley.com, or within this presentation. The endnotes on pages
21-23 are an integral part of this presentation.
This presentation may contain forward-looking statements. You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date on which they are made, which reflect management’s current estimates, projections,
expectations or beliefs and which are subject to risks and uncertainties that may cause actual results to differ materially. For a
discussion of risks and uncertainties that may affect the future results of the Firm, please see the Firm’s Annual Report on Form 10-K
for the year ended December 31, 2021.
The statements in this presentation are current only as of their respective dates.
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